US OIL Elliott Wave Technical Analysis – 4th September, 2013

Last week’s analysis expected more upwards movement from US Oil, which is not what happened. Price has moved lower to breach the invalidation point at 108.17 on the daily chart.

Click on the charts below to enlarge.

Cycle wave b is incomplete, and is unfolding as a double zigzag. Primary wave X within it was a contracting triangle.

Extend the triangle trend lines outwards. The point in time at which they cross over may see a trend change, and this may be where primary wave Y ends.

There is not normally a Fibonacci ratio between subwaves W and Y within doubles. A more reliable way to calculate a target for this to end is using the ratio between intermediate waves (A) and (C) within the second zigzag of the double.

Cycle wave b may not move beyond the start of cycle wave a. This wave count is invalidated with movement above 146.73.

There are two structural possibilities for minor wave 5: either an impulse or an ending diagonal. The impulse was invalidated with movement below 108.17. Minor wave 5 is most likely unfolding as an ending expanding diagonal.

Within the diagonal all the subwaves must subdivide into zigzags, including the third wave. The fourth wave of a diagonal should overlap back into first wave price territory, but may not move beyond the end of the second wave. Minute wave iv may not move below 103.51.

Within minute wave i zigzag there is no Fibonacci ratio between subminuette waves (a) and (c).

Within minute wave ii zigzag there is no Fibonacci ratio between subminuette waves (a) and (c).

Within minute wave iv zigzag minuette wave (c) is 0.27 short of 0.618 the length of minuette wave (a).

Minute wave iii is longer than minute wave i, and minute wave iv is longer than minute wave ii. The diagonal is expanding. This would expect minute wave v to be longer than equality with minute wave iii which would be achieved at 114.27. We should expect upwards movement to reach this point at least.

I have seen diagonals sometimes have a third wave which is still the longest, so this minimum is a guideline with a good probability but if it is not reached, as long as the subdivisions are correct, the diagonal may still be valid.